As the fastest and simplest way to discharge your debts and reset your financial situation to a clean slate, most people shouldering overwhelming debt try to first file for Chapter 7 Bankruptcy. If you are approved, all the money you owe will be wiped out and creditors are no longer allowed to pursue any sort of restitution. However, in order to qualify for Chapter 7 bankruptcy, you first need to determine your income with a means test.

The primary purpose of the Chapter 7 means test is to stop people with high incomes or significant savings from avoiding Chapter 13 bankruptcy payment plans. The idea is that only those in the most desperate of financial situations should be allowed to have their debts completely eliminated. This does not mean that you need to be penniless, though, to qualify for Chapter 7. Rather, you typically need to be unable to repay at least 10% or your debt in a 5-year period.

By comparing your current monthly income (CMI) to that of others with similar family sizes in your state, the means test will determine if you are above or below the average. If you are below, you can expect to be approved, or at least considered, for Chapter 7 bankruptcy. If you are above, you are not necessarily out of luck.

By claiming your actual expenses for the following, you may be able to reduce your disposable income to a level that qualifies you for Chapter 7 bankruptcy:

• Charity contributions
• Child care
• Disability insurance
• Health care
• Income taxes
• Involuntary deductions
• Mandatory education
• Secured debts – mortgages, car payments, etc.

Get the Help You Need to Pass the Chapter 7 Means Test

Even though the means test is meant to be a straightforward tool to help people from all walks of life determine if they can file for Chapter 7 bankruptcy or not, it can still seem overly complicated. Your CMI might not accurately reflect what you actually earn each month. You could have actual expenses that the means test doesn’t normally consider.

Whatever the reasons for your financial troubles, the team of knowledgeable Houston bankruptcy attorneys at Maida Law Firm, P.C. believe that you should have confidence when taking the Chapter 7 means test. Do not be rejected due to a simple mistake, miscalculation, or oversight. When you contact one of the firm’s lawyers for assistance, you will be backed by more than 40 years of experience and Texas Board of Legal Specialization certified individuals.

If you live in Houston, Beaumont, or the surrounding area and want to increase your chances of passing the Chapter 7 means test, schedule a free consult with Maida Law Firm, P.C. today!